If a country is experiencing chronic deficits on current account, what must ultimately happen to its exchange rate?
a. it must appreciate
b. it must depreciate
c. the market will shift it from floating to fixed
d. the market will shift it from fixed to floating
e. it will become equalized, that is, the same rate as in other countries
B
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In a closed economy, if the goods market is in equilibrium, national saving is $2 trillion, national consumption is $7 trillion, and government purchases are $2.5 trillion, then GDP equals
A) $7 trillion. B) $9.5 trillion. C) $11.5 trillion. D) Not enough information has been provided to determine the answer.
When economists say goods are scarce, they mean:
a. consumers are too poor to afford the goods and services available. b. consumers are unwilling to buy goods unless they have very low prices. c. goods are generally freely available from nature in most countries. d. the desire for goods and services exceeds our ability to produce them with the limited resources available.